If you’ve elected to purchase voluntary life insurance as a benefit offered by your employer, you’ve made a wise decision to help protect your family financially in the event of your death. Deciding to purchase voluntary life insurance might leave you with some questions, like whether voluntary life insurance has cash value.
Whether your voluntary life insurance has cash value depends on what type of insurance you purchase. Investopedia tells us there are two types of voluntary life insurance that employers provide: voluntary whole life insurance and voluntary term life insurance.1 Investopedia goes on to note that with whole life coverage, “cash value accumulates according to the underlying investments.”1
However, it’s important to note that voluntary whole life insurance might not be an option in your benefits program. According to ValuePenguin, “it's less common for companies to offer employees voluntary permanent life insurance, such as whole or universal policies, but it is available through some benefits plans.”2 ValuePenguin also notes that the premiums of voluntary permanent policies may be higher than voluntary term policies, noting that the change in price may be largely influenced by their ability to build cash value and portability.2
In closing, when deciding which type of voluntary life insurance is right for you and how much to buy, you should carefully consider your financial situation, your family, and your future. A financial advisor or a licensed insurance agent can help you navigate these decisions. However, if your mind is made, and you do plan on purchasing voluntary life insurance, it is highly recommended that you fully understand your policy, its benefits and limitations, and whether it has other features like building cash value before signing on the dotted line. Please contact your benefits administrator or insurer with any questions you may have before or after purchase.
Categories: Group Life, Insurance